Credit cards are a financial instrument that can be used by families to make unexpected expenses and have a backup for when the budget is thigh but for other people they are just a way to borrow money.
However, having a credit card is a responsibility because it is a debt that the person has to pay later. Both groups (the ones that want to spend the money and the ones that want to have a backup) will want a high credit limit because they will be able to spend more money or to have a larger backup. In this article we are going to give you some advances about how to get a higher credit limit in your credit card.
Advices to get a higher credit limit from your bank
The first thing that you can make is apply for a new credit card that has a higher credit limit than your current credit card. You can look for the options in the market (check for the credit card that your bank offers but also look for other alternatives if you have other bank account) so you can have a wide perspective about the things that you can achieve.
In order to get a new credit card with a higher credit limit you will need to have the documentation requested by the bank and the credit history and credit score that the bank is looking for.
Having a new credit card with a higher credit limit will allow you to have more money to spend on things that you want to buy or have a bigger budget in case of an emergency.
But with an extra credit card comes a responsibility because you will have to be alert about fraudulent transactions.
However, banks offers mobile applications that will inform you about every transaction made with your credit card.
The second thing that you can make is ask for an increase in your credit limit. But there are some things that you should consider before doing it because you may get rejected.
Not every card provider will approve an increase in the credit limit if you don`t have what they are looking for. Banks usually look for reliable customers so they can have a long term relation with them so if you have been a customer for many years make sure that you mention it when you are asking for a higher credit limit. But if you have less than a year been a customer you shouldn`t ask for an increase in the credit limit because you have more chances of getting rejected. And you can also have a penalty in your credit score every time the bank checks it to evaluate if you can have a higher credit limit.
The third thing that you can make is waiting until you bank increases your credit limit automatically without asking for it. That will happen when you have more time been a customer and managing responsibly your credit card because the bank will see that you are a good client and will give more credit limit (so you will be able to spend more).
If you are a reliable customer that is great for the bank because they will earn money from the interests that they charge in the balance and that is why they may give you a higher credit limit even if you haven`t asked for it. But if you are not a reliable customer then the bank will not increase your credit limit and you will have to ask for it or apply for other credit card.
The fourth advice is to consider the fees of asking for a higher credit limit because banks may charge a fee if you ask for it, other if you get rejected and maybe other if you have the approval. So, make sure to ask about the fees before asking for the increase in the credit limit because those fees will impact your balance and your possibilities to pay it may change.
The fifth advice is not been greedy when you ask for an increase in your credit limit. You should not have higher expectations about the increase in your credit limit; if you have a $1,000 credit limit don`t expect an increase for a $15,000 credit limit because you will not get it.
But if you get the increase you can go from $1,000 to $1,250 or $1,300 maybe because the bank will not give you that much difference between your previous credit limit and the new. Increases should be around 10 and 30% of your credit limit.
The sixth advice is to reduce the debt – to – credit radio of your credit card because it will improve your credit score. You can reduce it just by paying your debt and avoiding new expenses with the credit card until you can lower it and show the bank that you are good managing your finances and you can have a higher credit limit. Other way to reduce that ratio is by having a higher credit limit so you will reduce it more if you get the approval for the increase in the credit limit.
The last advice is to be open for other alternatives because if you just need a higher credit you should not focus only on an increase in your current credit card. You can ask for other credit cards with similar characteristics to the one that you have and you will be able to increase your general credit limit without asking for an increase to the bank. That will be a good technique if you find other cards with lower interest rates or lower fees because you can choose between which one to use when you are going to make a purchase depending on what are you buying.